(Extracted from Annual Report 2016)
Undoubtedly, 2016 was one of the most challenging years for KKB Group. The slump in crude oil price has inevitably impacted not just on the oil and gas industry, but the global economy as a whole. The capital expenditures cut and deferment of most field developments by Oil Companies has resulted in the slowdown of both the Upstream and Downstream industry and KKB Group is not spared from the storm hitting the industry.
Results of KKB Group for FY 2016 were impacted by a persistently challenging and difficult market situation. The Group's core business had to contend with the continued uncertainty in the global economy demonstrated by limited number of contracts and works secured for both the Manufacturing and Engineering sectors.
Amidst the challenging backdrop, the Group closed 2016 with a revenue of RM103.1 million and net loss of RM5.7 million. The overall weak result was due to increasing raw materials cost that was exacerbated by the rapid weakening of the ringgit against the greenback on the back of lower business volume.
The overall operating environment, nevertheless, is more complex and volatile. Our board and management continue to identify and address all conceivable scenarios for the coming years, focus on opportunities or obstacles that lie ahead, and incorporating them in our group planning.
Taking a leadership role as we navigate through challenges is not something new for the KKB Group. Our history and success have been built on how we managed change in times of adversity
The sound track records of the Group, its experienced and prudent Management, the strong financial and cash position and its low gearings will no doubt allow the Group to reposition itself well and continue to participate competitively as and when business opportunities arise.
Despite the prolonged uncertainties in the global economy, escalation of costs due to inflationary pressure, volatility of global raw material steel prices and the sharp fluctuation of foreign exchange rates affecting the Group's performance, the Board remained committed and focused on its long term strategies to identify viable new business opportunities to strengthen the Group in years to come. We continue to look at technology and talent to support and expand our core business in Structural Steel Fabrication engineering for the Oil and Gas Sectors to complement our traditional engineering business.
On behalf of the Board, I would like to take this opportunity to thank our management team and employees of the Group for their enthusiastic effort, valuable contribution and unfailing continued support. Their hard work, unwavering commitment and team spirit in a demanding and challenging business environment have certainly contributed much to the success of the Group.
My heartfelt gratitude to my fellow directors, our valued shareholders, customers, suppliers, bankers, business associates, advisers and relevant authorities which we have been dealing with over the last 55 years, we thank you for your continuing support and unwavering confidence in us.
Thank you.DATO KHO KAK BENG